Denver wants heads to roll in St Barbara brawl

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St Barbara, the patron saint of miners, would not be amused. Her namesake goldminer, Perth-based St Barbara Mines, is the subject of an unholy boardroom stoush with its biggest shareholder, Resource Capital Funds of Denver, Colorado.

RCF, a 22 per cent shareholder and previously a major creditor, will today requisition a meeting of shareholders at which it will seek to dump the group's executive chairman, Stephen Miller, and another director, Kevin Dundo.

In their place RCF wants to install former exploration supremo for the Gutnick family of companies, Ed Eshuys, and a corporate lawyer with 10 years' experience as WMC's general counsel, Colin Wise.

RCF, a shareholder since early 2002, cut to the chase yesterday when flagging the attack on the board, saying it believed Mr Miller had "presided over the erosion of substantial shareholder value".

RCF's senior partner, James McClements, claimed Mr Miller had "repeatedly failed to deliver on forecasts made by the company over the past two years".

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Among the forecasts was one by Mr Miller in 2002 that, by 2005, St Barbara would be a 500,000 ounce-a-year gold producer.

It is not within a bull's roar of achieving that sort of production, as is reflected in the group's market value of about $25 million. The stock closed at 4.3c on Friday, down from its 52-week peak in August last year of 10c a share.

"Over the past two years, Mr Miller has presided over the worst performing pure gold producer on the ASX. He is also one of the highest-paid executives in Western Australia with a salary package of $550,069 last year," RCF said.

It also called for more information on a proposed merger cum scheme of arrangement, which it claimed Mr Miller had discussed with some shareholders and market participants.

Mr McClements said RCF became involved in St Barbara because of Mr Miller's representations on forecasts for the company and proposed gold production targets.

He said that RCF had tried to be a patient and positive shareholder. Last September, it agreed to swap a $7.3 million loan to St Barbara for equity in the company, increasing its stake from 8 per cent to its current level.

He said RCF had now run out of patience with promised forecasts and wanted to see the company achieve shareholder value through optimum gold production under new leadership and management for the benefit of all shareholders.

A spokesman for St Barbara said yesterday that the company planned to make a "full response" to RCF's move and its judgement of Mr Miller's leadership today.